John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context

Question 265: To ask the Minister for Enterprise, Trade and Employment the countries to which Irish jobs have been relocated in the past three years; if the underlying causes have been identified; and if he will make a statement on the matter. [13386/08]

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

There are many factors that influence a firm's decision to relocate. Firms adjust their plant location and utilisation strategies to address matters such as accessing new markets, moving production nearer to customers, meeting firm or market specific customer relationship issues, accessing technology or other competitive considerations. The result is flows of investment and employment across borders. Ireland successfully manages this process, while winning many prestigious and value added investment, and enterprise policies have enabled the economy to replace lost jobs with others of equal or higher value.

It is not possible to audit the extent to which job losses in the economy arise due to firms relocating abroad. Information received by the enterprise development agencies from client companies which have closed plants or downsized their workforces suggests that job losses have been attributable to a range of factors including loss of contracts or a drop in demand for products, restructuring and rationalisation within companies and relocation of operations abroad. The last mentioned of these factors, according to the feedback from these companies, has been a relatively minor factor.

What establishes the competitive credentials of the economy is our ability to replace quality jobs with others that are of the same or higher skill level. There is also no doubt that labour markets are changing at an increasingly fast pace due mainly to the impacts of globalisation, immigration and demographic factors. We are responding with new policies and new opportunities for our labour force. Labour market programmes play an important role by providing the skills needed for unemployed persons to get back to work while at the same time providing the skilled labour needed by employers to improve their productivity.

The relocation of businesses within particular types of industry is a reality of modern global manufacturing for a highly developed economy such as Ireland. There are benefits and costs resulting from globalisation. The clearest demonstration of the benefits to Ireland from globalisation is illustrated by inward Foreign Direct Investment. It should be noted that in addition to attracting foreign direct investment, IDA Ireland also places significant focus on embedding existing multinational enterprises in Ireland, by encouraging such enterprises to increase the scale of Irish subsidiaries, and to also expand the range of activities undertaken in Irish subsidiaries to include less mobile types of operations (e.g. R&D activities, Supply Chain Management etc. According to the IDA, 34% of foreign investments in 2007 were expansions to existing facilities. This process of embedding subsidiaries of multinational enterprises makes relocation less likely. I am satisfied that we are taking the measures needed to meet the challenges of global competition.